Temenos’ Business Analytics solution adopted by 50% of the top 20 largest credit unions in Canada
Temenos Insight Business Analytics solution enables credit unions to address margin pressure and increase profitability and efficiency
Central 1 Fall Conference & Credit Union Trade Show, Vancouver, Canada – 6 November 2012 – Temenos (SIX: TEMN), the global provider of banking software, today announces significant growth in its Canadian operations, with nine deals signed for its Insight Business Analytics solution in the past year, including new projects with Synergy Credit Union and Innovation Credit Union, signed in September 2012.
The two credit unions are collaborating to share the same project framework for the implementation of Temenos Insight, reducing the cost of the project and enabling greater savings for each credit union. Synergy Credit Union estimates that with the newly acquired capabilities it will increase its return on assets by 15 basis points per year – which would equate to an annual uplift of $1.5M CDN in net profits.
Both credit unions originally sought Temenos Insight after learning of the success experienced by Summerland Credit Union in British Columbia, which has already quantified yearly staff cost savings of 16% for just one report produced using the Temenos Insight Operational Intelligence module. With many Temenos customers running over 100 reports, this saving typically equates to hundreds of thousands of dollars annually.
Temenos’ flexible ‘out of the box’ business analytics software, tightly integrated with Microsoft Office components, supports banks and credit unions seeking new ways to grow against a backdrop of increased competition in a tough economic landscape. As mergers and acquisitions amongst Canadian credit unions become increasingly important to the long-term survival of smaller institutions, many credit unions are seeking an easy way to consolidate information and reporting through common technology platforms. The merged entities can operate as one much more quickly with access to consolidated data, without the need to do a full banking system conversion immediately.
Credit unions generate a high proportion of their revenues from net interest income, where margins are shrinking as a result of pricing pressure and higher funding costs. Consequently, higher levels of revenue diversification are needed, with credit unions now starting to focus more on commercial banking, wealth management, leasing or credit cards to drive new sources of revenue, especially high margin fee income, and spur growth. Despite challenging economic and competitive conditions, some credit unions are still experiencing success - Westminster Savings Credit Union achieved strong growth and maintained its margins this year, and its Commercial Services division, which uses Temenos Insight business tools, achieved double digit growth.
Temenos Insight provides a 360 degree view of the business across a financial institution, including elements such as retail banking, wealth management, credit cards, commercial, insurance and leasing, presenting the information in intuitive dashboards, clear graphical visualisations and reports - ensuring rapid and flexible access to information to make accurate, timely and profitable decisions. In addition, credit unions come from a culture of sharing gains with their member-owners, something which is an important competitive advantage and differentiator across the credit union industry. Consequently, managing profitability is becoming an even greater imperative, with Temenos Insight a key tool to help financial institutions understand and optimise the profitability of their products and their relationships.
Synergy Credit Union and Innovation Credit Union are both existing Temenos clients, each signed in the last quarter of 2011 for the Operational Intelligence module of the Temenos Insight solution which helps decision makers to produce timely and flexible operational reporting such as full product portfolio, channel and pricing analysis from data automatically collected from the core banking system. The decision to extend this relationship with the addition of further modules – Customer Intelligence, Financial Intelligence and Insight Vision which help clients improve financial performance, increase profitability, and organically grow their asset base – is the direct result of the quick and efficient implementation of the original project.
Don Gemmell, Controller with Summerland Credit Union, said:
Temenos Insight Business Analytics is a very important part of our operations. Because the tool is so easy to use, it can be used productively by staff with very diverse needs. With just one of the reports that we have recently automated using Temenos Insight, we’ve been able to quantify labour cost savings of $7000 per year. In addition, we expect to generate significant savings in time and money with our audits this year, as most of the information that auditors require is now at their fingertips.
Les Messmer, CEO, Synergy Credit Union, comments:
From the experience we have had with Temenos Insight over the past year and the most recent modules we’ve acquired, including Customer Intelligence and What-If pricing, we estimate that we can save at least the cost of one full-time employee’s labour costs, and increase our profitability by up to 15 basis points relative to our asset size per year. This translates to approximately $1.5M CDN uplift annually.
Kent Jesse, Chief Innovation and People Officer, Innovation Credit Union, said:
We are very excited to be part of Temenos' strong Canadian user community. Temenos Insight Business Analytics allows us to unleash the power of our data to make accurate, reliable and profitable business decisions. Based on Microsoft technologies we already have, and a wealth of out of the box reports and dashboards designed for credit unions, the solution is extremely intuitive and easy to deploy. Temenos empowers every area of our organisation, from finance, to marketing and branch operations, with the relevant information for their role. Real-time access to information is no longer a nice to have, but is instead a must have to be efficient, competitive and maximize the value we deliver back to our members.
David Arnott, CEO, Temenos says:
With Insight, banks and credit unions are able to leverage their operational, risk and financial data and turn it into a distinct source of competitive advantage. Banks and credit unions running Insight are able to analyse data faster and more accurately, helping them to reduce the cost of analytics as well as take more timely and better-informed decisions. In the post-crisis era, financial institutions face many margin pressures, such as higher capital adequacy requirements, and analytics will prove to be a key tool for increasing margins - in particular, by identifying the markets and segments for successful expansion, and by giving banks the tools and information to cross-sell more effectively and manage risk better, greatly increasing their return on assets. We are excited by the results we are achieving together with our Canadian customers and hope to take the software to a wider audience in North America.
Temenos will be present at the Central 1 Fall Conference & Credit Union Trade Show in Vancouver on the 7-9th November 2012.